Estimating the implications of water reform for irrigators in a sugar growing region

Water reform is a national priority in Australia. The Council of Australian Governments (COAG) put a framework for water reform in place in 1994, which imposes on irrigation regions stringent pricing requirements for water and the inclusion of environmental considerations into allocation decisions. Many irrigation areas do not yet comply with COAG requirements. The Lower Burdekin in North East Queensland is one of these irrigation areas. This paper develops a conceptual framework of water reform and generates an Applied General Equilibrium (AGE) model to investigate the impacts of potential water reform scenarios for an irrigation area with features of the Lower Burdekin. The first part of this paper reports on the application of soft systems methodology to develop a conceptual model of the implications of water reform for irrigators and regional-scale flow-on effects. The second part of the paper develops a quantitative model of water reform and presents the results of scenario analysis performed by the AGE model. Specially, the outcomes of an important water reform option are shown for economics, social and environmental objectives.